A Case Study of Board Control and Governance in a Venture Capital Portfolio Company 1980–1997
2005 (English)In: The Finnish Journal of Business Economics, ISSN 0024-3469, Vol. 2, 267-281 p.Article in journal (Refereed) Published
Contracts in venture capital have been examined most often through the lens of agency theory. From this perspective, the venture capitalist sits on the board of directors of portfolio companies in order to monitor the behaviour of the entrepreneur as chief executive officer and agent of the investors. The governance provided by such a board is different, however, from that provided by the boards of larger corporations. The role of the board, in small corporations, is more involved than that of their larger brethren. In this paper, the governance provided by the board of a new start-up
venture is examined in detail. The case follows a single syndicated technological investment undertaken, originally, at the seed stage and followed through to merger and public listing. The case demonstrates the intensive involvement that early stage venture investors have in their portfolio companies showing the difficulty of trying to describe the complex interactions that take place in a dynamic system under a single static theoretical mold. The growth and success of this venture was due, in large part, to the
contribution of the non-executive directors.
Place, publisher, year, edition, pages
2005. Vol. 2, 267-281 p.
venture capital, case study, agency theory, board of directors, entrepreneur
IdentifiersURN: urn:nbn:se:umu:diva-16553OAI: oai:DiVA.org:umu-16553DiVA: diva2:156226